Headquarters in Austria

OMV and its Abu Dhabis agree on merger

The joint venture is to be founded under the name Borouge Group International.(Bild: APA/ROBERT JAEGER)

The oil and gas group OMV and its major shareholder ADNOC from Abu Dhabi have now agreed to merge their two petrochemical subsidiaries Borealis and Borouge.

A joint venture is to be founded under the name Borouge Group International, in which OMV and ADNOC, the Abu Dhabi National Oil Company, are to hold equal shares. At the same time, an agreement was reached on the purchase of Nova Chemicals for 9.4 billion euros, OMV announced on Monday.

OMV is to inject 1.6 billion euros into the joint venture, which is to be based and headquartered in Austria and initially listed in Abu Dhabi, but later also on the Vienna Stock Exchange. The Executive Board is to be appointed by both companies "unanimously on the basis of qualifications", but ADNOC alone may appoint the Chairman of the Supervisory Board.

Years of negotiations
One of the largest chemical players in the world, a plastics group that ranks among the top 5, is thus created from scratch. The agreement was preceded by months and years of talks - as early as November 2023, it was reported that "final negotiations are underway".

Borealis and the Arab company Borouge produce so-called polyolefins. These are contained in 40 percent of all plastics. They are used, for example, in cables, pipes, packaging and medical devices. Until now, the plastics subsidiary Borealis was mainly active in Europe, Borouge only in Asia and Africa.

The approval of the authorities and the signing of the contract documents are still pending. In addition, OMV and ADNOC still have to agree on implementation agreements.

"Sensible investment for the future with well-known partners"
The German Investors' Association (IVA) initially sees the agreement on the merger as positive. "The 'eternal' poker about Borealis has come to a successful end," said IVA board member Florian Beckermann in a statement to APA. OMV's participation in Borouge is a "sensible investment in the future with well-known partners", especially as Borouge is likely to dominate the Asian market in the coming decades. Whether the purchase of Nova Chemicals makes the deal "disproportionately more expensive" is still to be examined.